January 24, 2024
What is Affiliate Tracking?: A Comprehensive Guide
Data rules the world. Amongst the many gifts the ‘Internet of Things’ has given us is our reliance on data to function intelligently through the digital world. Performance marketing channels are no different. In the vast landscape of partnerships, tracking affiliate performance metrics plays a pivotal role in measuring the success of affiliate marketing programs. Understanding affiliate tracking and how it works is essential for businesses and marketers aiming to optimize their performance and maximize returns.
Our time at Affiliate Summit West gave us many insights into pain points for marketers and brands trying their hand at partnerships. Tracking capabilities were a chief concern that colored many different conversations. Many brands lack a robust tracking system, making them unable to make informed decisions about commissions and general program success. In this article, we’ll delve into the intricacies of affiliate tracking, exploring its definition, purpose, and the key components that make it an indispensable tool for winning in the affiliate space.
What is Affiliate Tracking?
Affiliate tracking is used by businesses and publishers alike to monitor and measure the performance of their affiliate marketing campaigns. Affiliate marketing involves a partnership between advertisers and affiliates who promote the advertiser’s products or services in exchange for a commission on sales. Tracking affiliate data traces, records, and attributes these actions to the respective affiliates.
Why It Matters
It should probably go without saying that tracking is integral to analyzing the effectiveness of any performance campaign. The ability to track promotions on both a program-wide and affiliate-specific basis is the way brands and partners are able to better pattern their program around the most lucrative strategies moving.
Additionally, tracking affiliate-generated actions and conversions is imperative for building your commission structure and properly allocating funds to the appropriate party. Without having a reliable source of truth as a guideline for how to optimize and scale your partnerships, you can never unlock the full potential of affiliate marketing as the high-yield performance channel it is meant to be.
CRM Solution for Tracking Affiliate Performance
As stated above, many companies and publishers struggle to keep track of their affiliate performance data. At ASW, publishers spoke about having to warn advertisers that their promotions could be deprioritized if they don’t have efficient or up-to-date tracking protocols. Essentially, brands shoot themselves in the foot by having disjointed tracking systems. Enter Mosaic. Our technology enables brands to scale their campaigns, optimize their promotions, and track and analyze their affiliate performance all in one place.
The Reports feature allows brands to get a wide-angle view as well as specified reports, like Rising Affiliates and Underperforming Affiliates. This takes the headache out of trying to synthesize data from various sources that may not paint an accurate picture of your results. Let’s just say skewing your data is a big no-no.
Key Components of Affiliate Tracking
Before technologies like Mosaic, affiliate tracking could be boiled down to four main components to be effective. Imagine having all of these components streamlined with automations you can customize to show you exactly what your program needs…we digress. Let’s get into the most common aspects of tracking affiliate program data.
Unique Affiliate Links
Each affiliate is provided with a unique tracking link that identifies them as the source of the traffic or sale. These links typically contain a special tracking code or parameter that distinguishes one affiliate from another.
Cookies play a crucial role in tracking down affiliate data. When a user clicks on an affiliate link, the system places a cookie on their device. This cookie stores information such as the affiliate ID and tracks the user’s interactions with the merchant’s website. If a user purchases within the alotted time frame, the affiliate is credited with the sale.
Different affiliate programs may use various attribution models to determine how they attribute commissions to affiliates. Common models include last-click attribution, first-click attribution, and multi-touch attribution. Last-click attribution credits the affiliate whose link was clicked last before a conversion, while first-click attribution credits the first-clicked affiliate.
Tracking systems monitor and record conversions, which can include sales, sign-ups, or other predefined actions. They use this data to calculate commissions owed to affiliates.
Keeping track of affiliate-driven actions stands as a linchpin for businesses seeking to harness the power of affiliate marketing. With its ability to measure performance, attribute conversions, and ensure fair compensation, affiliate tracking empowers advertisers and affiliates alike. As the landscape continues to evolve, understanding and implementing effective tracking mechanisms will remain essential for driving success in affiliate marketing campaigns. If your tracking systems need a serious makeover, book a free demo with us to learn more about how the MDS platform can help!